Binance Hit by More Regulatory Scrutiny, This Time in Israel
Israel’s Capital Market Authority has asked Binance to clarify its activities in the country.
Key Takeaways
- Binance has come under scrutiny from Israel’s Capital Market Authority.
- In response, the exchange has halted marketing activities to Israeli citizens and removed several accessibility features.
- Despite Binance CEO Changpeng Zhao advocating for more proactive compliance, the exchange is still facing regulatory issues.
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Binance has stopped marketing activities to Israelis and removed Hebrew language support following intervention from Israel’s Capital Market Authority.
Binance Caught in Licensing Issue
The world’s biggest crypto exchange is facing more regulatory scrutiny.
According to a Thursday report by Israeli news outlet Globes, Israel’s Capital Market Authority, the governmental body in charge of crypto exchange licensing, has asked Binance to clarify its activities in the country. The report stated that the exchange had not applied for a license to operate in Israel from the Capital Market Regulatory Authority as the reason for the intervention.
In response to the CMA’s comments, Binance has halted marketing activities to Israeli citizens and removed several accessibility features. According to Ben Samocha, who runs the local crypto media platform CryptoJungle, the exchange has removed Hebrew language support on the Binance website and delisted the Israeli shekel for credit card purchases. Globes estimates approximately 200,000 Israelis use the exchange to trade cryptocurrencies.
The extent of the CMA’s inspection is not yet clear. However, judging by Binance’s reaction, it appears to be preparing for the worst by proactively removing support for Israeli citizens.
Regulators worldwide have issued warnings that Binance was not a registered business last year. In June 2021, the U.K’s Financial Conduct Authority stated that the exchange was not permitted to undertake any regulated activities, such as offering futures or derivatives trading, without the FCA’s prior written consent.
Additionally, Binance has cut futures and derivatives products across Europe due to regulatory pressure. While the exchange still operates in many European countries, it has not been so lucky elsewhere.
Authorities in Malaysia issued an enforcement action against Binance last July, ordering the exchange to disable the Binance.com website and mobile apps in the country. The Malaysian Securities Commission said that by “illegally operating” in the country, Binance violated the Capital Markets and Services Act 2007.
Whether Israeli authorities will take the same kind of action as Malaysia remains to be seen. However, While the firm’s CEO Changpeng Zhao has previously stated that Binance will be more proactive in its compliance with local laws, the exchange is still encountering similar regulatory issues to the ones it faced previously.
Disclosure: At the time of writing this piece, the author owned ETH and several other cryptocurrencies.
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